Ringgit retreats as US dollar strengthens

Ringgit retreats as US dollar strengthens
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KUALA LUMPUR (Feb 3): The ringgit depreciated, as the US dollar regained its strength, amid the dovish tone on inflation by the European Central Bank (ECB) and Bank of England (BOE).

At 9am on Friday (Feb 3), the ringgit had eased to 4.2580/2640, against the greenback from Thursday’s close at 4.2445/2490. 

On Thursday, both the ECB and the BOE announced interest rate hikes of 50 basis points.

“The US dollar is higher today (Friday), as both the ECB and BOE were net dovish to expectations.

“While the broader stronger greenback is an overhang, the predominant theme currently impacting Asian currencies is the uncertainty over the near-term economic outlook on China amid stretched positioning,” said SPI Asset Management managing partner Stephen Innes.

In a note to Bernama, he said that the weaker China Caixin manufacturing purchasing managers index (PMI) early this week rocked the recovery boat a touch.

The Caixin PMI index reading remained below 50 at 49.2 in January, compared with December's 49.0.

Meanwhile, the ringgit traded mostly higher against a basket of major currencies except for the yen, where it had depreciated to 3.3098/3147 from 3.2924/2961 at Thursday’s close. 

The local note rose against the Singapore dollar to 3.2474/2525 from Thursday’s close at 3.2498/2534, improved vis-a-vis the pound to 5.1986/2059 from 5.2381/2437, and was better against the euro at 4.6395/6461 from 4.6685/6735 previously.